UK digital infrastructure struggling to keep pace with demand

infrastructureThe UK is struggling to create the digital infrastructure it needs to keep up with burgeoning employment and investment levels in new technology. A new study from IT recruitment firm Experis claims there has been an 18 per cent increase in the number of permanent job roles in the IT sector advertised across the UK in the first quarter of 2015. Meanwhile, a report from Santander’s commercial business division claims that the UK’s SMEs are planning to invest £53bn in digital business  over the next two years. All of this should be good news except for the fact that digital experts are warning that the UK is about to hit the digital buffers over the next two decades, according to experts who will present their findings to the Royal Society next week.

According to Andrew Ellis of Aston University, the UK could be forced to introduce internet rationing because demand for online services may consume the country’s entire power supply within 20 years. He will also warn that, unless action is taken, optical fibres could reach their limit within eight years. Prof Ellis claims the major telecom operators alone account for national energy consumption equivalent to the output of three nuclear power stations, and rising internet demand could consume the nation’s entire power supply by approximately 2035.

This may have the unwelcome effect of constraining growth in the UK’s digital industries. According to the Experis study, the UK is experiencing unprecedented growth in the number of IT jobs advertised, especially in roles such as security, cloud and web development with a resultant increase in salaries. Crucially demand is growing across the UK in hubs such as Cambridge, Bristol and Manchester as well as London’s Tech City.

Meanwhile, the UK’s SMEs are planning to invest heavily in their online presence, with over half (54 percent) planning to develop their websites, 10 percent creating their first ever website and 13 per cent introducing online payment systems. According to Santander, the biggest spenders on digital are small businesses in the financial services and IT sectors. On average, IT companies have already invested £46,429 in the last year, while financial services companies have invested £49,500. Over the next two years, IT firms typically plan to increase this by £43,962, while financial services companies expect to spend £42,083 more.

“Investment in digital capabilities can significantly enhance business growth opportunities for small and medium-sized businesses,” said Stephen Dury, MD, SME markets & business development, Santander Corporate & Commercial. Just having a functional website can have a dramatic impact on a firm’s visibility and connectivity with customers and other stakeholders. However, while it is great to see that many firms are focused on this, the concern is that a significant number are still failing to invest effectively and are therefore missing out on these opportunities.”

Whether the UK’s energy and digital infrastructure is able to keep pace with this demand in the longer term, remains to be seen.